Lucknow, Nov 6: A hike in the rail passenger fares seemed inevitable as the Indian Railways authorities are trying desperatly to cut losses. Railway Board chairman VK Agarwal said during a visit here that the railways was in a dilemma about whether to increase freight charges or passenger fares. "We are really caught in a tight spot. While the freight tariff, our main source of revenue, is already quite high and any further escalation is likely to further cut down our market share, passenger fare hike would not be able to meet our entire requirement," he said.According to him, the market share of railways in freight traffic has come down from 80 per cent to 40 per cent in the last several years, largely on account of an increasing shift in traffic to the road transport sector.He said that a hike of 10 per cent in the lower and middle class fares could mop up an additional Rs 7000-Rs 8000 million to cover the burden arising out of the recent increase in the diesel price but "that would remain grosslyinadequate to meet our needs".
He felt that the railways had already reached a saturation point as far as the upper class fares were concerned. "We have observed that our first class air conditioned passengers have switched to air travel after the airlines came up with competitive fares," the seniormost official of Indian Railways pointed out.
The Khanna Commission, set up to probe the Gaisal accident in North-East Frontier Railway about four months ago had recommended a comprehensive Rs 150 billion action plan for improvement of the safety aspect and overall development of the systems. This could only be met through special government subsidies.
Agarwal cited the case of British Railways, which had recently received a grant equivalent to Rs 70 billion from the British government to carry out large-scale repairs and renovation of its systems. (IANS)
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.